1643: The colony of New Plymouth, Massachusetts
levies the first recorded income tax in America.

1861: Congress passed the first income tax law as
an emergency measure to fund the Civil War.

1872: Congress repeals the income tax law.

1894: As a response to complaints that excessive reliance on tariffs as a source
of revenue resulted in an increase in the cost of imported goods, Congress again passed an income tax law.

1895: The US Supreme Court ruled that the income tax law was unconstitutional.

1913: In February the 16th Amendment, which states "Congress shall have
the power to lay and collect tax on incomes, from whatever sources derived, without apportionment among the several states,
and without regard to any census or enumeration", was ratified by the necessary 3/4 of the states. On October
3rd Congress passed the Revenue Act of 1913, which created the first permanent US income tax.

Under this act, the first $3000 of income for single persons and $4000 for married couples was
exempt from taxation. A "normal" tax of 1% was applied to income above $3000 or $4000, and a "super" tax of from 1-6%
was applied to income in excess of $20,000. Deductions were allowed for business expenses (including depreciation),
interest paid on "personal indebtedness", all national, state, county, school and municipal taxes paid, casualty losses, and
worthless debt. In the first year only 1 out of every 271 American citizens were taxed and $28 Million in revenue
was raised.

1916: The Federal Eatate Tax was enacted to help generate additional revenue
to fund America's anticipated entry into the first World War.

1917: Congress raised tax rates in response to the increasing cost of the war
and approved credit for dependents and deductions for charitable contributions.

1922: For the first time preferential tax treatment was provided for capital
gains.

1932: The tax law was amended to provide that US presidents were liable
for federal income tax on their salaries. Franklin Roosevelt was the first president since Abraham Lincoln to pay federal
income tax on his presidential salary.

1935: The Social Security tax, 1% on the first $3000 of wages, was enacted.

1942-1945: New tax laws, in response to the cost of World War 2, created withholding
on wages, more tax brackets for lower income taxpayers, the standard deduction, a personal exemption for dependents, a deduction
for medical expenses, and increased tax rates. By the end of the war the maximum tax rate was 94%.

1961: Taxpayers were required to provide their Social Security or other taxpayer
identification number to banks and other financial institutions so they could report interest and dividend payments to the
IRS.

1964: Tax rates were reduced from a range of from 20% to 94% to from 16% to
77%. The Income Averaging method of tax computation was introduced.

1970: Congress created a Minimum Tax so high-income individuals could
not completely avoid paying taxes through the use of preferential tax shelters, loopholes and deductions.

1972: Robert D Flach, who would later become the internert's WANDERING TAX
PRO, prepares his first Form 1040 as a paid preparer.

1975: Low-income taxpayers were allowed to claim a refundable Earned Income
Credit (EIC).

1979: Unemployment compensation was made partially taxable.

1981: Tax legislation reduced tax rates by 25% over 3 years, indexed tax brackets
for inflation, and applied the same tax rates to earned and unearned income.

1984: For the first time recipients of Social Security and Railroad Retirement
benefits were subject to tax on up to 50% of the benefits received, depending on the recipient's income.

1986: The largest revision of the Tax Code since 1954, the Tax Reform Act of
1986, was enacted. The law reduced the number of tax brackets from 14 to 2, decreased the maximim tax rate from 50%
to 28%, repealed the dividend exclusion, Income Averaging, the itemized deduction for sales tax paid and the preferential
treatment of long-term capital gains, introduced the passive activity rules, the Kiddie Tax, the deduction from gross income
for health insurance premiums paid by self-employed individuals, and the 2% of AGI limitation on most miscellaneous itemized
deductions, phased out the itemized deduction for personal (credit card, auto loan, etc.) interest, limited the deduction
for business meals and entertainment to 80%, and replaced the additional personal exemption s for age 65 and blind with an
increased standard deduction.

1987: For the first time taxpayers were required to list the Social Security
number of dependent children, age 5 and over.

1990: The Revenue Reconciliation Act of 1990 added a third tax bracket (31%)
and instituted the reduction of itemized deductions and phase-out of personal exemptions for high-income taxpayers.

1993: The Omnibus Budget Reconciliation Act added the 36% and 39.6% tax brackets,
increased the maximum tax on Social Security benefits from 50% to 85%, and reduced the deduction for business meals and entertaining
from 80% to 50%.

1998: In response to abusive treatment of taxpayers by the Internal Revenue
Service, the IRS Reform and Restructuring Act of 1998 was enacted.

2001: Congress passed the Economic Growth and Tax Relief Reconciliation Act
of 2001, the largest tax cut in over 20 years, with 85 major provisions. All provisions of this act will expire in 2011.

2003: To stimulate the economy, Congress passed the Jobs and Growth Tax Relief
Reconciliation Act of 2003, the third major tax bill in as many years, and the third largest tax cut in history.